How Much Will Proposition 23 Hurt Renewable Energy?

Building solar: Workers for the solar thermal company eSolar, based in Pasadena, California, install mirrors at a solar thermal plant in Lancaster, California. Proposition 23 could put similar planned projects in jeopardy.

A proposition on the November ballot in California would suspend the state’s major greenhouse-gas emissions law. If it passes, it could delay or eliminate many proposed renewable-energy projects in California. However, its impact is difficult to predict because other legislation will help spur investment in many projects and green-tech startups.

Proposition 23 would suspend a 2006 law aimed at reducing California’s greenhouse-gas emissions to 1990 levels by 2020. The law, known as AB 32, authorizes a wide range of rules and regulations designed to meet this goal. The main part of the law is a cap-and-trade system under which affected businesses would have to either reduce their own emissions or buy emissions allowances from other companies that have reduced their emissions.

The law is also the basis for a “low-carbon fuel standard” that requires refiners to change their mix of fuels to reduce greenhouse-gas emissions, as well as a “renewable electricity standard” requiring that 33 percent of the electricity generated by public and private utilities come from renewable sources by 2020.

Proposition 23 would suspend the implementation of AB 32, and the rules and regulations connected with it, until the unemployment rate in California drops from its current level (about 12 percent) to 5.5 percent for four consecutive quarters. This has only happened three times in the last 40 years, and the state’s Legislative Analyst’s Office doesn’t expect it to happen again in the next five years. The proposition’s major supporters include oil refiners Tesoro, Valero, and Flint Hills Resources. It is opposed by groups such as the National Resources Defense Council.

By invalidating regulations that require utilities to get a third of their electricity from renewable sources, Proposition 23 could put a long list of renewable energy projects in jeopardy. This list includes several very large solar-thermal power plants proposed for installation in the desert. Together, these projects would generate nearly 5,000 megawatts of power. That’s about as much peak power as five nuclear reactors, although nuclear power plants generate more total electricity since they run both day and night.